Chicago Fed National Activity Index for March (Text)

April 26 (Bloomberg) -- Following is the text of
the Chicago Fed’s National Activity Index from
the Federal Reserve Bank of Chicago.

Led by declines in production-related indicators, the Chicago
Fed National Activity Index (CFNAI) decreased to -0.29 in March
from +0.07 in February. All four broad categories of indicators
that make up the index deteriorated from February, with the
production and income and personal consumption and housing
categories both making a negative contribution to the index in
March.

The index’s three-month moving average, CFNAI-MA3, decreased to
+0.05 in March from +0.37 in February. March’s CFNAI-MA3
suggests that growth in national economic activity was near its
historical trend. The economic growth reflected in this level of
the CFNAI-MA3 suggests subdued inflationary pressure from
economic activity over the coming year.

The CFNAI Diffusion Index also moved lower in March, declining
to +0.25 from +0.48 in the previous month. Forty of the 85
individual indicators made positive contributions to the CFNAI
in March, while 45 made negative contributions. Thirty-three
indicators improved from February to March, while 51 indicators
deteriorated and one was unchanged. Of the indicators that
improved, six made negative contributions.

The contribution from production-related indicators to the CFNAI
declined to -0.13 in March from +0.12 in February. Total
industrial production was unchanged in both March and February,
while manufacturing production edged down 0.2 percent in March
after increasing 0.8 percent in February. Similarly,
manufacturing capacity utilization decreased to 77.8 percent in
March from 78.0 percent in the previous month.

Employment-related indicators contributed +0.09 to the CFNAI in
March, down from +0.16 in February. Total payroll employment
increased by 120,000 in March after rising by 240,000 in
February.

In contrast, the unemployment rate decreased from 8.3 percent in
February to 8.2 percent in March, and average weekly initial
claims for unemployment insurance reached a four-year low.

The contribution from the consumption and housing category to
the CFNAI was -0.28 in March, down from -0.24 in February.
Housing starts edged down to 654,000 annualized units in March
from 694,000 in February, while housing permits increased to
747,000 annualized units from 715,000 over the same period. The
contribution from the sales, orders, and inventories category to
the CFNAI also decreased, ticking down to +0.03 in March from
+0.04 in February.

The CFNAI was constructed using data available as of April 19,
2012. At that time, March data for 51 of the 85 indicators had
been published. For all missing data, estimates were used in
constructing the index. The February monthly index was revised
to +0.07 from an initial estimate of -0.09. Revisions to the
monthly index can be attributed to two main factors: revisions
in previously published data and differences between the
estimates of previously unavailable data and subsequently
published data. The revision to the February monthly index was
due primarily to the former.